Laiki brokerage is largest Cypriot KEPEY on ATHEX

IPO market seen warming up in 2007

 

Laiki Securities, a member of Laiki Investments Financial Services Pcl (LI), has become the largest Cypriot EPEY trading as a remote member on the Athens Stock Exchange (ATHEX) as more and more Cypriot investors decide to trade in Greek stocks in search of a better return and diversified risk.

Athos Chandriotis, Manager at Laiki Investments told the Financial Mirror that the Laiki brokerage was the top Cypriot EPEY with the biggest market share on the ATHEX in December 2006, according to ATHEX official data.

Laiki Securities was 53rd in the overall ATHEX December rankings on total volume of EUR 13.57 mln, followed by SFS in 58th position, Hellenic Bank Investments in 62nd, CLR in 63rd, Atlantic 64th, CISCO 68^th, with Argus and Troilos in the last places at 73rd and 74th.

According to Chandriotis, the December Laiki Securities volume in the ATHEX was almost evenly split between institutional funds and retail business generated by small investors. However, the level of volume in the first 15 days of January is up sharply and has already reached EUR 15 mln with institutionals accounting for over 75% of volume and small investors 25%.

Chandriotis said most of the interest is for FTSE 20 Greek stocks, mostly banks and especially Marfin Financial Group and Egnatia Bank. “Basically, it is in titles of companies with a presence in Cyprus such as OPAP, Ethniki and Alpha Bank to name a few,” he said, explaining that the growing interest is due to efforts by Cypriot investors to diversify and look for new opportunities.

He also revealed that about 70-75% on average of all incoming retail orders for stock exchange transactions are placed by the public through Laiki eTrading, allowing the Group to reap the benefits from its early decision to invest heavily in technology.

 

Part of global market

Chandriotis said the sharp increase in equity prices last year and in the first ten days of 2007 was natural to expect since it followed the 2000-2005 depressed situation. Now the rally is backed by rising profits, megadeals and better fundamentals, as he sees the improving profitability situation at CSE listed companies continuing in 2007.

For the average investor, there are two important things to note, Chandriotis said. First, is to analyze and study a company well before investing in its stock and  preferably to ask for professional advice, and secondly to note that through the common trading platform, Cyprus has at last joined the global stock market community.

“Through the CTP we are tied to the ups and downs of ATHEX, which in turn is tied with other European exchanges, which in turn are tied to Wall Street. So when

Wall St.

sneezes, Europe could catch a cold and then possibly spread to Cyprus.”

Laiki clients wishing to trade in overseas stocks are doing so through the Laiki Global eTrading platform, which gives access to more than 20 international exchanges including NASDAQ, NYSE, LSE, Frankfurt, Paris, and most European and Asian stock markets.

Laiki will soon expand the network to allow investors to trade in CFDs. Commissions on overseas trades are at 0.70%.

 

Fund management

During 2007, Chandriotis sees the debut of selective companies on the CSE through IPOs, with exciting M&A developments still to happen in the banking sector and the rest of the economy as the restructuring drive continues.

He regrets that while the local mutual funds law has not been allowed to be implemented because of a small number of professional groups, foreign investors are investing in Greek and Cyprus stocks through mutual funds.

The Greece-Cyprus Opportunities Fund, launched and managed by Laiki Investments in Luxembourg has already accumulated funds in excess of EUR 12 mln and has been heavily subscribed by foreign investors. Since its launch in April 2006, the fund has had a 43% return.

“It’s really a shame that Cypriot investors do not have the opportunity to invest in local mutual funds.”

However, Chandriotis has high hopes on a recent amendment in the law according to which Cyprus provident funds need to have approved investment managers. “We are bidding to become the investment managers for a number of these funds, in order to help boost revenues,” he said.

Laiki Investments is also boosting its research department in order to offer a comprehensive package to current and future local and foreign institutional investors.

More opportunities are seen in investment banking and specifically in BOT projects where Laiki Investments wants to advise and raise funds for mega projects.

Referring to the prospects of Laiki Investments, Chandriotis called on investors to trust the company’s management and its board. “We are on target to deliver a very satisfactory performance in 2006 and because of the improving market conditions, will be in a position to repeat a positive performance in 2007 and onwards.”

“Costs are under control while revenue is on the increase, which means higher profits for LI,” said Chandriotis, adding that several lawsuits pending against the Group are not expected to have a major impact on the future of LI.